Tesla Model 3 RWD: 2024 Tax Credit Cut in Half

Inflation Reduction Act Changes Taking Effect Jan. 1, 2024

Potentially bad news for aspiring Tesla proprietors next year: the most sought-after Model 3 models, RWD and Long Range, will have their federal tax credits diminished starting on January 1st, 2024 due to new principles concerning battery components in electric vehicles.

As opposed to what remains true currently, eligible attempts for Model 3 trims will debase from $7,500 to $3,750 under the newly-amended Inflation Reduction Act instructions declared last week.

Tesla has made it known on their purchaser website, notifying individuals who are considering a purchase that they can secure the maximum potential tax deduction if they receive their Model 3 RWD or Long Range by the closing of December.

Tesla has declared that those who receive a new Tesla that is qualified and meet all federal requirements are eligible for a tax credit of up to $7,500. The credit will be reduced to $3,750 for the Model 3 Rear-Wheel Drive and Model 3 Long Range on January 1, 2024. To receive the full tax credit, customers must take delivery of their vehicle by December 31. This offer applies only to eligible cash or loan purchases.

Tesla recently updated the Model 3 page on its website, now stating that some of the variants of the electric car may see their federal tax credit reduced from 2024. This is in line with a similar message that had been posted on the page since July, which stated that reductions to the tax credit were “likely” to occur. However, the company did not specify which Model 3 variants might be affected at the time.

Now that the new tax regulations are clear, it appears that the Model 3 RWD and LR may be disadvantaged due to the fact that their battery packs contain parts produced by a “foreign entity of concern” – namely, China. Although Tesla has yet to divulge the exact reasoning behind the loss of full tax credit eligibility for these two Model 3 variants, it is likely related to the Chinese components.

If you are searching for a Tesla Model 3 and desire to benefit from the complete tax refund this month, then take note: the electric saloon car also includes 6 months of free Supercharging when delivered by December 31st.

It is probable that this promotional activity may be part of Tesla’s endeavours to fuel their sales during 2023. On the 18th October, in their third-quarter earnings report, they repeated their target of dispatching 1.8 million cars. From January to September of this year, Tesla has filled the Earth with a total of 1,324,074 automobiles, with the majority of them being electric vehicles – Model Y and Model 3 (1,278,169 units).

Regarding what will occur to the prices of U.S. electric vehicles under the new tax incentives in the forthcoming year, this is yet unclear. A few models might observe their subsidy abolished till the production of EVs and batteries increases domestically without Chinese resources, which could have an impact on the use of these cars presently. However, considering his fondness for prompt price modifications this year, it’s conceivable Tesla’s leader Elon Musk will manufacture his own alterations to preserve his corporation’s sales.

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